CHINA GREEN MATERIAL TECHNOLOGIES INC. 
By
Revenues -- First quarter revenues increased 31.4% to
Gross Profit -- Cost of goods sold was
Operating Expense -- Operating expenses in the first quarter of 2010
totaled
Operating Income -- First quarter income from operations increased 18.2%
to
Other Income (Expense) -- Other expenses were
Net Income -- Net income in the first quarter of 2010 was
The Company's effective tax rate was 17.8% in the first quarter of 2010 versus 15.0% for the same period in 2009.
As of
Mr. Su Zhonghao, Chief Executive Officer of China Green Material Technologies, stated, "We are pleased to report a 31% increase in revenues, which reflects increased sales to existing customers, as well as our ability to attract new customers in China and internationally. In 2009, we expanded our sales team and developed additional distributor relationships, which is allowing us to capitalize on the growing worldwide demand for environmentally-friendly biodegradable products."
"We believe there is a significant market opportunity for
Mr. Su Zhonghao concluded, "Looking ahead, we are focusing on two key
areas of growth: 1) further expanding our presence in China and entering key
overseas markets, including the U.S.,
(1) The Company issued common shares during the first quarter of 2010.
(2) Adjusted net income and adjusted net income per diluted share are non-
GAAP measures that the Company uses to provide information about its
operating trends and are considered important metrics in evaluating
the Company's business. The Company calculates adjusted net income
and adjusted net income per diluted share by excluding the impact of
certain non-recurring items; for the first quarter of 2010 the
excluded non-recurring items are a $123,404 loss on the disposal of
fixed assets and a $197,098 loss on long-term investments.
About China Green Material Technologies, Inc.
Website: http://www.sinogreenmaterial.com
China Green Material Technologies, Inc. (OTCBB: CAGM) is a China-based
manufacturer of starch-based biodegradable containers, tableware and packaging
products. Headquartered in
Safe Harbor Statement
This press release contains certain statements that may include
'forward-looking statements' as defined in the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are often identified by
the use of forward-looking terminology such as "believes," "expects,"
"anticipate," "optimistic," "intend," "will" or similar expressions. Such
forward-looking statements involve known and unknown risks and uncertainties
that may cause actual results to be materially different from those described
herein as anticipated, believed, estimated or expected. Investors should not
place undue reliance on these forward-looking statements, which speak only as
of the date of this press release. The Company's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of a variety of risks and other factors, including the risk that the
Company may not successfully open its planned new production facility in 2010
and those risks and other factors discussed in the Company's periodic reports
that are filed with and available from the Securities and Exchange Commission,
including the Annual Report on Form 10-K filed
CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2010 December 31,
(Unaudited) 2009
Assets
Current Assets:
Cash and equivalents $ 13,837,255 $ 7,321,276
Cash - restricted 100,000 3,443
Accounts receivable, net 5,706,576 6,524,510
Inventories 280,299 456,970
Accrued receivables 322,283 549,288
Other receivables 114,193 19,210
Deferred income tax assets 4,301 4,918
Prepaid expenses 49,856 29,436
Other current assets -- 78,863
Total Current Assets 20,414,763 14,987,913
Property and Equipment, Net 9,876,919 10,394,584
Intangible Assets, Net 5,033,587 5,060,559
Know-how Right, Net 2,133,293 2,160,533
Investment - At Cost 113,383 310,419
Total Assets $ 37,571,945 $ 32,914,007
Liabilities and Stockholders'
Equity
Current Liabilities:
Accounts payable and
accrued expenses $ 99,362 $ 302,786
Customer deposits -- 4,213
Due to stockholders/
officers, net 305,756 300,792
Taxes payable 346,359 430,408
Other current liabilities 1,493,499 1,469,121
Total Current Liabilities 2,244,976 2,507,320
Total Liabilities 2,244,976 2,507,320
Stockholders' Equity
Common stock, $0.001 par value,
100,000,000 shares authorized,
23,762,849 and 18,711,388 shares
issued and outstanding at March
31, 2010 and December 31,
2009, respectively 23,763 18,711
Additional paid-in capital 22,372,194 17,895,324
Reserve funds 1,215,465 1,152,569
Retained earnings 8,081,734 7,709,729
Accumulated other comprehensive
income 3,633,813 3,630,353
Total Stockholders' Equity 35,326,969 30,406,687
Total Liabilities and
Stockholders' Equity $ 37,571,945 $ 32,914,007
CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(UNAUDITED)
2010 2009
Revenues $ 2,789,398 $ 2,122,120
Cost of Goods Sold 1,615,790 1,173,830
Gross Profit 1,173,608 948,290
Operating Expenses
Selling expenses 42,723 39,129
General and administrative
expenses 242,761 157,829
Total Operating Expenses 285,484 196,958
Income From Operations 888,124 751,332
Other Income (Expenses)
Interest income 1,527 667
Loss on investments (197,098) --
Other income (expense) (164,260) 5,873
Total Other Expenses, Net (359,831) 6,540
Income Before Income Taxes 528,293 757,872
Provision for Income Taxes 93,394 113,892
Net Income $ 434,899 $ 643,980
Foreign Currency Translation
Adjustment 3,460 (45,240)
Comprehensive Income $ 438,359 $ 598,740
Net Income Per Common Share
-Basic and Diluted
-Basic $ 0.02 $ 0.03
-Diluted $ 0.02 $ 0.03
Weight Common Shares
Outstanding -Basic and Diluted
-Basic 22,415,793 18,711,388
-Diluted 22,415,793 18,711,388
CHINA GREEN MATERIAL TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
(UNAUDITED)
2010 2009
Cash flows From Operating Activities:
Net Income $ 434,899 $ 643,980
Adjustments to Reconcile Net
Income to Net Cash
Provided by Operating Activities
Depreciation and
amortization 340,394 325,961
Changes in deferred tax 617 --
Bad debt expenses (4,115) 3,673
Loss on long-term
investment 197,098 --
Loss on disposal of fixed
assets 123,404 --
Changes in operating assets and
liabilities
Accounts receivable 822,663 (724,202)
Inventories 176,703 51,785
Accrued receivables 236,460 201
Prepaid expenses and other
receivables (45,943) (3,834)
Other current assets -- (55,924)
Accounts payable and
accrued expenses (207,805) 80,710
Customer deposits 24,362 (9,985)
Taxes payable (84,087) 295,151
Other current liabilities -- 3,185
Net Cash Provided by Operating
Activities 2,014,650 610,703
Cash Flows From Investing Activities:
Restricted cash (96,557) --
Purchase of property and
equipment (7,297) (52,241)
Proceeds from disposal of
fixed assets 117,183 --
Net Cash Provided by (Used in)
Investing Activities 13,329 (52,241)
Cash Flows From Financing Activities:
Proceeds from shareholders/
officers loan 4,941 4,936
Proceeds from stock
issued 4,481,913 --
Net Cash Provided by Financing
Activities 4,486,854 4,936
Effect of Exchange Rate Changes on
Cash and Equivalents 1,146 (10,461)
Net Increase in Cash and Equivalents 6,515,979 552,937
Cash and Equivalents at Beginning of
Period 7,321,276 4,245,044
Cash and Equivalents at End of Period $ 13,837,255 $ 4,797,981
SUPPLEMENT DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for Interest $ -- $ --
Cash paid for Income taxes $ 219,036 $ --
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for financial and operational decision making, and as a means to evaluate period-to-period comparisons. The Company believes that these non-GAAP financial measures are useful to investors because they exclude a loss on the disposal of fixed assets and a loss on long-term investments that our management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of CAGM. Accordingly, management excludes the losses when making operational decisions. The Company believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to evaluate the Company's performance using the same methodology and information as that used by our management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measure. However, our management compensates for these limitations by providing the relevant disclosure of the items excluded. The following table provides a reconciliation of non-GAAP earnings per share to the equivalent GAAP measure.
First Quarter Ended
(in thousands, except per share data) 31-Mar 31-Mar
2010 2009
Net income $435 $644
Loss on disposal of fixed assets $123 --
Loss on investments $197 --
Adjusted net income (non-GAAP) $755 $644
Adjusted diluted earnings per share
(non-GAAP):
Basic $0.03 $0.03
Diluted $0.03 $0.03
For more information, please contact:
In China:
Feng Peng
HC International, Inc.
Tel: +86-138-1227-1616
Email: feng.peng@hcinternational.net
In the U.S.:
Christine Greany
HC International, Inc.
Tel: +1-858-523-1732
Email: christine.greany@hcinternational.net
SOURCE China Green Material Technologies, Inc.
